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Dine Brands Global, Inc. (DIN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 11.9% year over year to $230.8M and beat consensus ($223.4M), while adjusted EPS of $1.17 missed consensus ($1.45); adjusted EBITDA of $56.2M was below consensus ($62.6M). Revenue beat was driven by company-owned restaurant sales after acquisitions; EPS/EBITDA pressure reflected lower segment profit and higher G&A tied to remodels and dual-brand investments *.
  • Applebee’s delivered its first positive comp in two years (+4.9%) with positive traffic; IHOP comps improved sequentially but remained negative (-2.3%). Off-premise mix held near 22% at Applebee’s and 20% at IHOP with stable weekly averages ($12.8K and $7.6K, respectively) .
  • Guidance updated: Applebee’s FY domestic comp raised to +1% to +3%; IHOP FY domestic comp trimmed to -1% to +1%; FY adjusted EBITDA lowered to $220–$230M; G&A raised to $205–$210M; capex raised to $30–$40M, reflecting accelerated dual-brand and remodel spending .
  • Strategic catalysts: accelerating dual-brand rollouts (second domestic unit opened with 2–3x pre-conversion sales), Applebee’s “2 for $25” value/menu innovation, and IHOP “House Faves” expanding to seven-day everyday value; near-term investor focus on margin recovery and execution of company-owned portfolio stabilization .

What Went Well and What Went Wrong

What Went Well

  • Applebee’s momentum: +4.9% domestic same-restaurant sales in Q2, with traffic turning positive and off-premise sales up 7.6% year to date; Applebee’s outperformed Black Box in both sales and traffic, supported by value-focused menu innovation (“2 for $25”) and strengthened social media marketing .
  • Dual-brand strategy gaining traction: second domestic dual-brand opened (Uvalde, TX) with sales roughly 2–3x prior single-brand unit; pipeline oversubscribed for 2026 and on course for at least a dozen openings by year-end .
  • Liquidity and capital flexibility improved: $600M securitized notes issued at 6.720% and VFN capacity extended to 2030; quarter-end unrestricted cash of ~$194.2M with >$224M available VFN capacity .

What Went Wrong

  • Profitability pressure: adjusted EPS fell to $1.17 from $1.71 YoY and adjusted EBITDA to $56.2M from $67.0M, driven by lower segment profit and higher G&A (compensation/professional fees) tied to company-ops and initiatives .
  • IHOP still negative comps: -2.3% domestic same-restaurant sales in Q2 despite sequential improvement; commodity inflation (eggs/coffee) mid-single-digit expected for FY, pressuring store-level margin .
  • Guidance lowered for FY adjusted EBITDA and raised for G&A/capex, reflecting investment cadence; investors may question near-term margin trajectory and ROI timing for company-owned portfolio where liquor licensing and remodel closures temporarily weigh on profitability .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$206.3 $214.8 $230.8
GAAP Diluted EPS ($)$1.50 $0.53 $0.89
Adjusted EPS ($)$1.71 $1.03 $1.17
Adjusted EBITDA ($USD Millions)$67.0 $54.7 $56.2
Q2 2025 Actual vs ConsensusConsensusActualBeat/Miss
Revenue ($USD Millions)$223.4*$230.8 Beat
Adjusted/Normalized EPS ($)$1.45*$1.17 Miss
EBITDA ($USD Millions)**$62.6*$56.2 Miss
  • *Values retrieved from S&P Global.
  • **Note: Consensus EBITDA reflects S&P Global’s standardized definition; company-reported Adjusted EBITDA was $56.2M .

Segment/KPI snapshot:

KPIQ1 2025Q2 2025
Applebee’s domestic same-restaurant sales YoY (%)-2.2% +4.9%
Applebee’s off-premise mix (%)23.5% 22.0%
Applebee’s avg weekly sales per restaurant ($K)$12.8 $12.8
IHOP domestic same-restaurant sales YoY (%)-2.7% -2.3%
IHOP off-premise mix (%)21.2% 20.0%
IHOP avg weekly sales per restaurant ($K)$7.7 $7.6
Fuzzy’s domestic same-restaurant sales YoY (%)-12.2% -11.8%

System-wide reported sales by brand (millions):

BrandQ2 2024Q2 2025
Applebee’s franchise$1,102.0 $1,105.0
Applebee’s company-owned—$24.0
IHOP franchise$822.0 $799.9
IHOP area license$75.1 $72.5
IHOP company-owned—$4.0
Fuzzy’s franchise$51.9 $43.1
Fuzzy’s company-owned$0.3 $0.2
Total$2,051.3 $2,048.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Applebee’s domestic system-wide comp SSSFY 2025-2% to +1% +1% to +3% Raised
IHOP domestic system-wide comp SSSFY 2025-1% to +2% -1% to +1% Narrowed lower
Consolidated Adjusted EBITDA ($M)FY 2025$235–$245 $220–$230 Lowered
G&A ($M)FY 2025$200–$205 (incl. ~$35M SBC & D&A) $205–$210 (incl. ~$35M SBC & D&A) Raised
Capital Expenditures ($M)FY 2025$20–$30 $30–$40 Raised
Applebee’s domestic net restaurantsFY 2025-20 to -35 -20 to -35 Maintained
IHOP domestic net restaurantsFY 2025-10 to +10 -10 to +10 Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (prior)Q1 2025 (prior)Q2 2025 (current)Trend
Value/menu strategyApplebee’s and IHOP emphasized value; Applebee’s comps negative Applebee’s comps -2.2%; leaning into “2 for $25” Applebee’s comps +4.9% with positive traffic; “2 for $25” quarterly entrées; IHOP House Faves expanding to 7-day everyday value Improving execution, traffic-led recovery
Off-premise/digital & socialOff-premise steady; marketing repositioning Off-premise mix ~24% Applebee’s, ~21% IHOP Off-premise sales YTD positive each month; Applebee’s +7.6% in Q2; social engagement surging (TikTok views +500% etc.) Strengthening channel, brand reach
Supply chain & commoditiesCost vigilance; macro volatility Cost focus via CSCS Applebee’s commodities flat to slightly down; IHOP mid-single-digit increase (eggs/coffee); >$35M annualized cost savings projects YTD; tariff risks noted Mixed inflation, active mitigation
Dual-brand strategyInternational dual-brand expansion Pipeline development and framing Second domestic dual-brand with 2–3x sales; oversubscribed 2026 pipeline; target ≥12 openings in 2025 Accelerating deployment
Company-owned portfolioAcquired Applebee’s assets in Q4; rationale asset-light with targeted ops Began stabilization and remodel planning 70 units (~2% of system); temporary profit headwinds (liquor licensing, remodel closures, staffing/training); path to neutrality and refranchise in ~3 years Transition in progress
Macro/consumer behaviorPrice sensitivity noted Price-sensitive consumers managing checks Guests still trading down; value mix declining slightly; traffic leading Applebee’s comp Value remains key

Management Commentary

  • CEO John Peyton: “In the second quarter, we continued to build positive momentum across both Applebee’s and IHOP... our Dual Brands initiative is building traction… We remain confident that our ongoing investments will generate sustainable value for our shareholders and franchisees” .
  • CFO Vance Chang: “We successfully completed a refinancing transaction that strengthens our capital structure and enhances financial flexibility… We remain committed to delivering shareholder value through sustained financial performance and strategic investment” .
  • On Applebee’s comp and traffic: “Applebee’s outperformed Black Box… Traffic was the primary driver… positive for the first time since Q1 2023” .
  • On IHOP operations: “Server tablets… reduced product windows… improved order accuracy by five percentage points and improved table turns by four minutes year to date” .
  • On cost actions: “To date, in 2025, we have implemented projects resulting in over $35,000,000 of annualized cost savings across both systems” .

Q&A Highlights

  • Applebee’s “2 for $25” cadence: Management emphasized quarterly entrée additions with rigorous testing to manage complexity; value mix ~30% (higher than historical) and beginning to tick down as traffic improves .
  • IHOP House Faves expansion: Tests of seven-day everyday value produced positive traffic and sales; operational complexity reduced by halving LTOs and broad tablet adoption (~96% of restaurants) driving speed/accuracy improvements .
  • Company-owned profitability path: Temporary headwinds from liquor licensing lag, remodel closures, and staffing/training; expected AUV $2.0–$2.5M with low-to-mid teens four-wall margins post-transition, aiming to refranchise in ~3 years and maintain ~2–3% ownership .
  • Commodities and tariffs: Applebee’s commodities slightly down; IHOP mid-single-digit increase driven by eggs/coffee; tariff outlook fluid and not fully baked into forecasts .

Estimates Context

  • Q2 2025 results vs S&P Global consensus: Revenue beat ($230.8M vs $223.4M*), EPS miss ($1.17 vs $1.45*), EBITDA miss (company Adjusted EBITDA $56.2M vs S&P consensus $62.6M*). The mix of company-owned operations and higher G&A tied to remodels/dual-brand investments weighed on EPS/EBITDA despite top-line strength *.
  • Estimates likely to adjust: Applebee’s comp momentum and raised FY comp range may support revenue revisions upward; however, lowered FY adjusted EBITDA and raised G&A/capex suggest downward revisions to FY profitability and near-term margin expectations .
  • *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue strength offset by margin pressure: Expect near-term focus on the pace of G&A normalization and EBITDA recovery as remodel/dual-brand spending flows through .
  • Applebee’s inflection: Positive comps/traffic with “2 for $25” anchored promotions and off-premise growth are key drivers; continued momentum is a positive read-through for franchise royalties .
  • IHOP improvement but inflation headwinds: Sequential comp progress with operational fixes, yet eggs/coffee inflation and category dynamics temper near-term margin expansion .
  • Dual-brand acceleration as medium-term growth lever: Early domestic case studies with 2–3x sales uplift and an oversubscribed pipeline underpin unit economics; watch cadence and returns on capex .
  • Company-owned portfolio transition: Temporary profitability drag (licensing, closures) should ease as conversions complete; monitor AUV/margin milestones and refranchising timeline .
  • Capital structure improved: Securitization refinancing extends maturities to 2030; ample liquidity supports investments and shareholder returns (Q2 buybacks $6M, dividends ~$$8M) .
  • Trading setup: Near-term stock narrative likely driven by revenue beat vs EPS/EBITDA miss and lowered FY EBITDA guidance; catalysts include sustained Applebee’s traffic, execution on IHOP everyday value, and demonstrated dual-brand ROI .
Notes: Press release and 8-K figures cited above reflect company-reported GAAP and non-GAAP metrics; consensus/estimate comparisons use S&P Global data where indicated.